Austrian OMV Group plans to expand its current four billion euro cost reduction program, said CEO Rainer Seele, who added that it does not rule out the possibility of resorting to lay-offs due to the coronavirus crisis and the collapse of energy prices, Reuters reports.
A number of large oil companies have announced that they are reducing their capital expenditures for this year by 25%, or nearly $55 billion, after the oil price was cut by half.
OMV has already announced that it will reduce its spending by 20% this year and also reached an agreement to pay in installments the sum of $4.7 billion to increase participation in the Borealis plastic manufacturer, according to Agerpres .
“I expect new cost-cutting programs this year,” said Rainer Seele, in an interview published Wednesday in the German financial daily Handelsblatt. “We have not yet made a decision on short-term work programs or personnel restructuring. It is a possibility we cannot exclude,” said Seele.
Referring to the situation on the oil market, the head of OMV said he did not see an end to the current crisis.
“I am not very optimistic about the oil market. The excess of supply is continuing, and the stocks are too high. Nothing will change as long as the mobility of people in Europe or North America remains restricted. In fact, more than half of the world’s oil consumption is used by cars, buses, planes or trains,” he stressed.